The salaried class paid Rs331 billion income tax in the eight months of the current fiscal year—1,350% more than retailers. However, the government was still unable to seek relief from the International Monetary Fund (IMF) for the marginalised segment.
During the July–February period of this fiscal year, salaried individuals paid a total of Rs120 billion in income taxes, which is 56% more than the Rs211 billion collected during the same period last fiscal year.
Last year, the salaried class paid Rs368 billion in taxes. Despite this hefty burden on the salaried people, who pay taxes on the gross income without adjusting expenditures, the government did not lessen this burden with the IMF during the recently held talks.
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In contrast to Rs331 billion income tax paid by the salaried people, the shopkeepers, primarily unregistered, contributed barely Rs23 billion on account of withholding income tax on their sales. The traders’ tax payment under section 236-H was 1,350% lower than the salaried individuals’ tax payment.
The wholesalers and distributors also paid Rs16 billion withholding tax in eight months as almost half of them were not registered with the FBR.
The Unfair Burden
The Rs331 billion income tax on the salaried class is the result of the massive unfair burden the government has put on them since last June by the reduction in slabs. The highest slab’s overall tax rate is 38.5% because the maximum 35% rate is now unjustly applied to a monthly income of Rs500,000 plus a 10% surcharge.
The tax target for March is Rs1.220 trillion, which the FBR will once more fall well short of. The FBR has a massive challenge of raising Rs704 billion this week after collecting Rs515 billion up to Sunday. The final working day before the Eid holidays is Friday.
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